Michael E. Salassi
Ethanol is a high-octane fuel used primarily as a gasoline additive and extender. Since the late 1970s, methyl tertiary butyl ether (MTBE) has replaced lead as the primary gasoline additive in the United States. Over the past few years, however, several states have banned the use of MTBE as a gasoline additive because of its environmental problems resulting in groundwater contamination. The reduction in use of MTBE and recent surging prices for petroleum-based fuels are dramatically increasing the demand for ethanol and the interest in ethanol production in the United States.
Ethanol can be produced from carbohydrates such as sugar, starch and cellulose by fermentation using yeast or other organisms. Current production of ethanol around the world uses two primary feedstocks: grain crops (primarily corn and wheat) and sugar crops (sugarcane, sugar beets or molasses). A recently completed cooperative research project between the Louisiana Agricultural Experiment Station in the LSU AgCenter and the Office of Energy Policy and New Uses, Office of the Chief Economist, U.S. Department of Agriculture evaluated the economic feasibility of producing ethanol from sugar feedstocks in the United States. These sugar feedstocks included: sugarcane juice, sugar beet juice, sugarcane or sugar beet molasses, raw sugar and refined sugar.
Approximately 60 percent of world ethanol production uses sugar crops as the primary feedstock, with the remaining 40 percent using grain crops as the primary feedstock. The choice of feedstock used to produce ethanol is based primarily on the least-expensive feedstock crop available to ethanol producers in a particular country. The United States produced 3.9 billion gallons of ethanol in 2005, up from 3.4 billion gallons in 2004. Currently, corn is the dominant feedstock being used in the production process. Corn-based ethanol accounts for approximately 97 percent of the total ethanol produced in the United States. In 2005, Brazil, produced 4.2 billion gallons of ethanol, up from 4.0 billion gallons in 2004. Production of ethanol in Brazil uses sugar and molasses from sugarcane as primary feedstocks. Production Process
Ethanol from corn in the United States is produced by one of two processes: wet milling or dry milling. In wet milling, corn grain is soaked to facilitate separation of the grain into its component parts, with the starch from the grain fermented into ethanol. In dry milling, the corn grain is first ground into flour and then mixed with water and enzymes for fermentation into ethanol. Ethanol conversion rates using corn as the feedstock are estimated at approximately 2.65 gallons of ethanol per bushel for a wet-mill process and 2.75 gallons per bushel for a dry-mill process. For the 2003-05 period, net feedstock costs for a wet-mill plant were estimated at about $0.40 per gallon with total ethanol production costs estimated at $1.03 per gallon. Net feedstock costs for a dry-mill plant were estimated at $0.53 per gallon with total ethanol production costs at $1.05 per gallon.
The majority of ethanol produced by other countries around the world uses sugar crops as the primary feedstocks. Sugarcane is the predominant feedstock in these countries, although several countries use sugar beets as the main ingredient in ethanol production. Since feedstock costs are a major cost item in producing ethanol, the relatively low market prices for sugar crops in many of these countries, compared to the United States, makes the production of ethanol from sugar crops economically feasible.
Louisiana and Florida are the major sugarcane-producing states in the United States, comprising about 80 percent to 90 percent of total production. Sugar beets are produced in several states, with the leading states of Minnesota, North Dakota, Michigan and Idaho accounting for about 80 percent of total U.S. production. Both crops are processed to produce a final product of white, refined sugar (sucrose). Sugar beets are processed directly into refined sugar, while sugarcane must first be processed into raw sugar and later refined into white sugar. Ethanol from Sucrose
The theoretical yield of ethanol from sucrose is 163 gallons of ethanol per ton of sucrose. Factoring in maximum obtainable yield and realistic plant operations, the expected actual recovery would be about 141 gallons per ton of sucrose. Using 2003-05 U.S. average sugar recovery rates, one ton of sugarcane would be expected to yield 19.5 gallons of ethanol, and one ton of sugar beets would be expected to yield 24.8 gallons of ethanol. One ton of molasses, a byproduct of sugarcane and sugar beet processing, would yield about 69.4 gallons of ethanol. Using raw sugar as a feedstock, one ton would yield 135.4 gallons of ethanol, and refined sugar would yield 141 gallons.
Sugarcane and sugar beet feedstock and processing costs were estimated for the 2003-05 period for the purpose of estimating the cost of producing ethanol using these feedstocks. The cost of converting sugarcane into ethanol was estimated to be approximately $2.40 per gallon based on 2003-04 sugarcane market prices and estimated sugarcane processing costs. Feedstock cost was estimated at $1.48 per gallon of ethanol produced, representing 62 percent of the total ethanol production cost. The cost of converting sugar beets into ethanol was estimated to be approximately $2.35 per gallon based on 2003-04 sugar beet market prices and estimated sugar beet processing costs. Feedstock cost was estimated at $1.58 per gallon of ethanol produced, representing 67 percent of the total ethanol production cost.
Molasses, from either sugarcane or sugar beets, was found to be the most cost-competitive feedstock. Estimated ethanol production costs using molasses were approximately $1.27 per gallon with a $0.91 per gallon feedstock cost. Given the market prices of raw cane sugar and wholesale refined beet sugar in the United States, raw or refined sugar would be costly to convert into ethanol. Ethanol production costs were estimated at $3.48 per gallon using raw sugar as a feedstock and were estimated at $3.97 per gallon using refined sugar. Feedstock costs using raw or refined sugar accounted for more than 80 percent of the total estimated ethanol production cost. Potential for Sugarcane
Results from this study have several important implications concerning the production of ethanol from sugar crops in the United States, in general, and from sugarcane in Louisiana, in particular.
First, under existing fermentation technology, corn is currently the cheapest feedstock available for use in the production of ethanol in the United States. If other feedstocks are being considered, their costs must be comparable to corn for them to be economically viable over the long run. The use of molasses, from either sugarcane or sugar beets, does appear to be economically competitive with corn for use as an ethanol feedstock.
Second, given current and future projected sugar and ethanol market prices, it appears that the production of sugar is the most profitable use of sugarcane or sugar beets. With relatively high ethanol prices, several feedstocks may be profitable to use in making ethanol. However, decreases in ethanol prices, which are anticipated over the next several months, dictate that the least-expensive feedstock available be used in ethanol production to be economically viable.
Third, cellulosic conversion of biomass into ethanol offers the potential for a wide variety of feedstocks to be used in ethanol production. A great deal of research is currently being conducted across the country to develop a commercial process of converting biomass into ethanol. Sugarcane, a crop which produces a substantial amount of biomass per acre, would certainly be a viable feedstock candidate in this process. Michael E. Salassi
, Professor, Department of Agricultural Economics & Agribusiness
, LSU AgCenter, Baton Rouge, La.(This article was published in the winter 2007 issue of Louisiana Agriculture.)